Category: Money tips Release Date: 2006-09-20
Qingdao Haier (600.69 thousand quotes, information, reviews, search) is the days relative to 2007 "Ten golden shares" one, since the days relative to the "2007 Annual strategy will" focus has been to promote the market strong. Recently, we went to companies in the field research, through the company's depth of communication, we believe that the performance of the company remain promising in the future.
In 2006, the domestic household refrigeration industry, continued growth in the scale of production, industry revenues and profits to achieve simultaneous growth and shake off the 2005 "income does not increase profits" in the corner. From the product yield in terms of rapid growth in production of refrigerators, home air-conditioner production to enter a stable growth period. National Bureau of Statistics data show that in 2006 the domestic refrigerator production of 4,200 million units, up 28.9%; household air-conditioner output of 7,943 million units, an increase of 5.5%. From the domestic refrigeration industry, the size of the income and profit point of view, the first three quarters of 2006 achieved total sales revenue of 2,092 billion yuan, up 15.1%; cumulative pre-tax profit of 4.24 billion yuan, up 15.2%, to achieve simultaneous growth and sales revenue completely out of the domestic household refrigeration industry in 2005, "income not increasing profits" in the corner.
In 2006, the domestic household refrigeration industry average price of major products manufactured exports have different average rate increases. 2006 from January to October, refrigerator prices edged up 0.37 percent year on year; household air conditioner prices rose 4.1%, for the first increase since 2000. The export side, refrigerators average 94 U.S. dollars / units, up 15.5%; household air conditioners average 153 U.S. dollars / units, an increase of 8.51%, which is following the 2005 annual average price rise again after floating. We believe that the prices there are two main reasons for the driver, one of the purchase price increases of raw materials to end-consumption part of the conduction; Second, the domestic appliance industry market share of leading enterprises to enhance the promotion of the domestic market sales structure.
Industry leading revenue and profit growth higher than the industry average, contrarian increase profitability. The past three years, industry leading 21% compound growth rate of revenue and profit compound growth rate of 17%, are far higher than the industry average. In particular, since 2005, household refrigeration industry, raw material prices continue to rise upstream industry profit compressed space, but the profitability of the industry leading upgrade to buck the trend, which fully shows the industry leading enterprise systems manufacturing advantages and anti-market risks.
Industry leaders to further enhance the market share. China's air conditioner market is showing oligopolistic or highly concentrated oligopoly type of market structure. Haier, Gree, Midea, led by the three major brands of domestic air-conditioning industry, the domestic market concentration has increased annually from 2002 to 33% in 2006 to 55%. The export market, the 2006 domestic air conditioning industry leader in the export market, strong development of export markets prompted the central tendency more evident than in the domestic market, the three major brands of industry exports accounted for 40% over the previous year increased 9 points.
We are the domestic household refrigeration industry trends, analyzing the domestic market demand and product updates to open up overseas markets to promote domestic household is increasingly becoming a dominant force in the development of the refrigeration industry, the industry leader in technological innovation, brand, and cost control advantages of a large-scale manufacturing will promote the product market and industry profits of further concentration of industry leading enterprises.
Qingdao Haier (600.69 thousand quotes, information, reviews, search) operating results have continued to grow capacity to company's existing assets (refrigerators, home air-conditioners) and scale of operations and profitability steadily. Quarterly Bulletin, 2006, 3 shows that the existing business of the company main business revenue grew 10.4%, Operating Profit increased by 35.6% year on year consolidated gross margin improved 2.7 percentage points year on year net profit margin increased 0.23 percentage points, net production gains rate increased 0.85 percentage points year on year.
Group of high-quality "white power" asset injection will contribute to thickening of 6,7 cents per-share earnings. Company intends to 4.97 yuan / share prices to the Haier Group, directed additional 142 million shares, the acquisition Group's four "white power" assets (see Table 1), would not only solve the issue of competition with the industry, and because the proposed acquisition of assets low level of net capital gains below the company's existing resources, this company's operating results will provide the impetus for sustainable growth.
Through the calculation, the company intends to acquire assets in mid-2006, the average rate of return on net assets of 9.33%, well above the company's existing assets, the level of return over the same period. It is obvious that these high-quality assets into the company's revenue will not only promote the rapid expansion of the scale, but also on the earnings per share has obvious thickening effect. In mid-2006 data, listed companies net profit of 18,713 million yuan, the corresponding share capital of 1.196 billion shares, earnings per share were 0.156 yuan; while the proposed acquisition of assets over the same period total net profit of 8,493 million (taking into account equity accounting for 5,634 million) , the corresponding share capital of 142 million shares. In considering the factors under the influence of capital expansion, we simulate the injection of assets after the company completed in mid-2006 earnings per share were 0.182 yuan (having regard to the impact of equity share), compared with earnings per share of assets into the pre-thickening of nearly 3 cents ( If for the full fiscal year, then the performance of thickened margin is expected to be 6,7 cents per share, or so), increase the level of performance increase of 16.7%.
To promote growth for the company's short-term factors. â‘?trademark fees can be exempted from annual savings of approximately 7,000 million in administrative expenses, thus easing the transaction costs associated with the rate of reduction resulting from higher operating expenses. â‘?in 2001, the Group had purchased at a premium domestic air assets 74.45% of the shares, resulting in 14.5 million equity investment difference between a 10-year amortization. Company plans to start in 2007 the remaining balance of 5.92 million yuan amortization write-downs of capital fund, then the next four years will no longer be amortized each year 145 million equity investment difference between investment income will make the year an increase in fully diluted earnings per share increased 0.1 yuan, while the net asset write-downs will promote the increase in the rate of net capital gains.
Distribution patterns change will facilitate the performance of the company to achieve sustained growth. Company decided to set up in Chongqing, Chongqing Haier Appliances Sales Co., Ltd. by the company set up 42 branches throughout the country to engage their own product sales. The company's previous product sales through the Haier Group's logistics platform to complete, while the Haier Group, the operation of an efficient logistics platform is also recognized by the market. Self-built sales channels for the company's initiatives, we believe that may in essence be the Haier Group's logistics platform to conduct business on the cut, meaning that the company self-built settlement in business marketing system will be totally independent of the Haier Group's logistics system, and we believe that this settlement process, cutting sales of the company's products will not impact end-sales market. Operating costs from the point of view, the company self-built business marketing channels may be a slight increase in the cost of clearing, but there is no respect of product marketing costs.
In the self-built marketing channels before the company's products are definitely worse resale values by Haier Group, a logistics platform for sales, and thus from the company's annual financial statements of historical perspective, its consolidated gross margin was lower than the peers in the industry nearly 10 percentage points, while the the corresponding rate is also lower operating expenses 7,8 percentage points, the company self-built marketing system on the impact of performance levels, according to our current available data is temporarily unable to make quantitative analysis, but one thing is certain, self-built marketing channels will be growth performance of the company will have a positive impact.
In addition, we understand that companies should also be re-directed through the issuance of Industry and Trade Company and the Group acquired the company's intention to purchase in order to achieve the procurement, production and marketing integration, and further solve the related-party transactions. This will help the company improve the main business revenue and profits and size, but huge profits part of the procurement and marketing will also promote growth for the company.
.. The level of market valuation with a premium of space through the establishment of sales companies to eliminate related party transactions will help the market revaluation of the company's intrinsic value. Marketing channels in the self-built before the company's appliance sales are made through the operation of Haier Group's logistics platform, although this would effectively reduce operating costs, but this has also led investors to listed companies and groups that exist to worry about a large number of related-party transactions that a large number of related-party transactions will affect the listed company's independence. In the tradable market, this situation has seriously affected the market valuation of the company's reasonable.
Follow-up to asset injection will further enhance corporate value. As far as we know, the future of the Haier Group in China all the "white" business would be from the A-share listed company Qingdao Haier (600.69 thousand quotes, information, reviews, search) to operate, so do not rule out the future of the current listed company owned by Hong Kong stocks Another piece of good quality "white power" assets (washing machines, water heaters) to return to the A-share listed companies note possible.
Improve its management structure to enhance the level of market valuation. The company through the implementation of equity incentive plans, to promote further market-oriented mechanisms for the internal assessment, which will help to enhance the investor's degree of market recognition.
Take into account the level of brand value on the valuation increase. Company is a leading enterprise in the domestic appliance industry, "Haier" is the first brand in home appliances, as a sponsor of the 2008 Beijing Olympics, "Haier" will win a fully demonstrated to the world an excellent opportunity for Chinese household electrical appliances. We believe that, if the 2008 Beijing Olympic Games appeared in China after their world-class home appliances brand, then the "Haier" will be the first one.
The secondary market valuation levels and there is departure from the company's intrinsic value. At present the whole A level of 34 times the average market price-earnings ratio (weighted shares outstanding, excluding losses), home appliance industry for 37 times (weighted shares outstanding, excluding losses), home cooling plate 29 times (weighted shares outstanding, excluding losses). According to our earnings forecasts, the company in 2007 as the leading home appliance industry, dynamic price-earnings ratio of only 21 times.
Earnings forecasts and investment rating company in 2006 we expect earnings per share 0.30 yuan.
Taking into account the formation of the company private placement of equity expansion, as well as the assets to be injected into the company's future performance and other factors will have a substantial contribution, we expect our 2007 earnings per share were 0.51 yuan (having regard to the expansion of equity dilution factor), per diluted share in 2008 income was 0.60.
According to our earnings forecasts, the company in 2007 as the leading home appliance industry, dynamic price-earnings ratio of only 21 times. To maintain an investment grade holdings.
